The Ernst & Young Letter

As you will no doubt know, Ernst & Young, the firm appointed by the court to be the Monitor of the whole debacle, accidentally sent out letters to many current Nortel employees, addressed to “All Known Creditors”, advising them of the situation and telling them that “information would be forthcoming” about how to establish a claim.

Nortel management was quick to contact all employees and tell them that this was “nothing to worry about” and that they will “act in the future” to “prevent these sorts of mistakes”. It seems as if we are hearing a lot of that talk from them as of late.

It is interesting to speculate, however, what this letter might mean for those who received it. Is it, as one commenter speculated, an indication that you are on “The List” and that your days at Nortel are numbered? Clearly, we cannot trust management for the truth anymore, as many employees are finding out the hard way.

The letter went out on the same day Nortel filed. (14th of January). So I wonder if there is some mistake. If the company at that time knew who will be let go, wouldn’t it have made sense to start sheding payroll already ??
On the other hand, why did they send it to some and others not .. confusing ..

There is always a layoff list well in advance of every quarter. It continuously gets updated and is only visible to a few select folks in the Finance Department along with E&Y consultants because they are the ones that have to do the writedowns every quarter. When I was there, I was told by a finance person they had planned layoffs all the way out to 2010.

You honestly believe that the same finance org that allowed the past 10 years of crap to occur (restatements, pension underfunding, over-paid acquisitions, “fraud”), can plan lay-offs 2 years in advance? Give your head a serious shake.

I think there will be layoffs based on the Least Effective performance ranking across all product areas – this is a GE methodology that has occurred yearly for the past 3 years. I think there will be more announcements around divestiture of business.

Will those that received “the letter” be canned? Time will tell, but I think that it was a process screw-up between NT and E+Y. The letter doesn’t state anything new – it is all on the Monitor site.

If Nortel does survive in some form, the rumour spreading, dooms-day predicting folks that are constantly talking trash in the office – will predictably be in the 5% next time around. The environment is tough already – why keep spreading dissent? Do something – leave or work – pick one.

You honestly believe that the same finance org that allowed the past 10 years of crap to occur (restatements, pension underfunding, over-paid acquisitions, “fraud”), can plan lay-offs 2 years in advance? Give your head a serious shake.

Most of that changed when Mike Z came in with GE HR processes. The whole layoff/writedown process of those laid off changed. And as soon as Nortel was classified as being “in restructuring” in 2007, layoff plans were made out to 2010 with quarterly updates to E&Y. This is firsthand information. Obviously you are one of ones still drinking the kool-aide if you think what’s happening is dissent. There’s no work left to do there because the company is in bankruptcy protection. Its basically a day to day operation.

Kool-aid is not a factor here. Attempting to maintain some form of quality of life and sanity is.
If an employee believes the company is going down in a ball of flames – you can bail out. If you think there is a chance it may survive and you want to be part of it – work. If you are somewhere in between, undecided, reading message boards where the most Protosphere-ical people share their infinite outsider wisdom…keep your learned rumor-wisdom to yourself.

As for no work to do…oh…with a log-in name such as Casual Observer I am assuming that you are not a Nortel employee and therefore are assuming everybody is sitting in the cafeteria comparing E+Y letters. Our partners are still working with us. Our R&D partners are working with us. We are making money in many areas.

Nortel has been losing money for more than a couple of quarters assuming “making money” means turning a profit.

For the record, I worked there for 10 years until late 2008. I repeat that the situation at Nortel is a day to day operation that is typical of a company that is under bankruptcy protection. Nothing I’ve posted here is a rumor. Mike Z wasn’t lying when he said 3-5 years for a turnaround. The turnaround he has referred to in the past is nothing more than a 3-5 year restructuring.

BTDT,
just a heads up…protospherical’s comments have been pretty much on the money for the last 3 years with dead-on statements that even analysts weren’t making until sometimes 2 quarters later…for example, the declining CDMA revenues.

and yes, some outsiders actually do have some wisdom to offer on the Nortanic situation

My wife received the letter as well. The last time she worked with Nortel i with Microsystems International. However, she was eligible for a tiny pension. So the set of all receivers is not just Nortel employees – but any Nortel employee, anytime, who Nortel might have a financial obligation for. ??